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Voluntary housing fails

04 Dec 2019

By Meg Hill

The City of Melbourne last month called for state-wide mandatory affordable housing provisions, admitting the developer-incentive policy had not secured anything since it was adopted in 2014.

“There is a shortfall of at least 5500 affordable rental homes in the City of Melbourne and that is anticipated to increase to approximately 23,000 by 2036,” planning chair Cr Nicolas Reece said at the November 12 Future Melbourne Committee meeting.

“That is simply an unacceptable situation for a civilised society and a world’s most liveable city like Melbourne. It is also the case that the current mechanisms in the Melbourne Planning Scheme which seek to encourage affordable housing are yet to deliver any affordable homes.”

Affordable housing refers to rental housing costed at under 30 per cent of a low- or medium-income household’s income.

The City of Melbourne’s submission to the state government included modelling by SGS Economics that suggested a mandatory inclusion mechanism could be used to deliver 10,000 affordable housing dwellings in the city.

The submission recommends a minimum state-wide requirement to be determined by modelling, but flexibility for local governments to increase it where needed.

It also recommends a cash-in-lieu option for developers to fund affordable housing elsewhere if it can’t be included in a development.

Mandatory affordable housing has been implemented to different extents in South Australia and the ACT, as well as overseas in the UK, Canada and the US.

Tamlin Gorter, a researcher at the Australian Housing and Urban Research Institute (AHURI), said the submission was a significant moment.

“I think it’s a very strong statement to come from the council, but I think it reflects the level of need in Melbourne for increased affordable housing,” she said.

“The fact that it has been recognised not only in Melbourne but across Australia is very significant.”

“Perhaps there’s just a bit of momentum there.”

Ms Gorter said AHURI had a strong body of research that suggested mandatory affordable housing was an effective measure. AHURI research includes a report on South Australia where there is now a 15 per cent requirement in new developments.

 

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